This application relates generally to the cashing of payroll and other checks authorized through a shared database using a biometric for identification, specifically the cashing of payroll checks authorized biometrically through biometric comparisons at a central database, a local database, or a local device.
Fraudulent checks and IDs are becoming increasingly common due to the availability of inexpensive color printers and check and ID forging software. Essentially, anyone can create and print high quality, fraudulent checks and identification cards.
Consequently, cashing payroll and other checks is becoming increasingly costly for both honest check presenters (hereinafter “consumers”) and check cashers (hereinafter “merchants”) due to criminals who present fraudulent checks and IDs. Merchants are negatively affected by check and ID fraudulence because they lose money to criminals when they cash a counterfeit or fake check. In turn, to compensate for this lost money, merchants must raise the fees they charge for cashing checks, thereby affecting all consumers as well.
Mechanisms of preventing check fraud include systems that manage 1) negative databases of checking account numbers, 2) negative databases of driver's licenses, and 3) check cashing allowances with merchant issuance of check-cashing cards.
A negative database of checking account numbers is effective in preventing fraud only if the check's account holder is the fraudulent party or a hold has been put on the account due to fraudulent activity. However, such databases are not foolproof. They are not capable of stopping criminals from stealing a legitimate account-holder's checks, forging them, and then cashing them with a fake ID, nor do they prevent criminals from stealing an innocent person's account number(s) and printing counterfeit checks for that account.
There are also problems with negative databases of consumer's driver's license numbers because criminals often use fake IDs to cash their fraudulent checks and can simply discard those used for previous fraudulent transactions and create new ones.
The third system, merchant-issued check cashing cards, is as riddled with problems as the first two fraud detecting systems. Chances are, if a criminal gets an innocent account holder's wallet, the wallet will not only include the account holder's blank checks but will also include their merchant-issued check cashing card. Therefore, the check-cashing card poses a greater risk to the innocent account holder because once the criminal has the account holder's checkbook and check cashing card, they can cash numerous checks without raising suspicion.
An added disadvantage of the last two systems is that both require a man-made token or device in order to carry out the check-cashing transaction. Certainly, people have become accustomed to carrying around such tokens, but their wallets are continually growing with the number of cards added to them daily.
Alternative solutions to the above-described systems include various other more technologically advanced proposals that use biometrics to verify the identity of a consumer desiring to cash a check. One such proposal is outlined in U.S. Pat. No. 6,145,738 and in U.S. Pat. No. 6,149,056. This system, however, is automated and does not connect the merchant with the check cashing process. Therefore, the system is not a service offering to help merchants establish consumer loyalty and a strong consumer base.
Other systems that use biometrics to verify the identity of a consumer presenting a check have been proposed. However, such technology is only protects a merchant against fraudulent behavior by checking a consumer's biometric and the presented check number against a local database that resides on the merchant's server. Said database of information is not shared among merchants and therefore might effectively alert a merchant of a consumer's fraudulent activity if that consumer displayed fraudulent behavior in their store. However, if the consumer displayed fraudulent behavior within the system at another store, the merchant would never know because merchants enrolled in such a system do not share consumer information.
In view of the above-described inefficiencies and vulnerabilities associated with the conventional methods of reducing check fraud, it is apparent that what is needed is a more effective system of check cashing and ID verification.